Is Samsung Electronics' Hurdle Clearing?... Target Price Surges, Driven by New Product Mix Expansion and Yield Improvement [Click eJongmok]

“Samsung Electronics Improves HBM4 Yield
Target Price Raised to 450,000 Won”

On September 1, LS Securities stated that concerns over mass production of Samsung Electronics' next-generation high bandwidth memory (HBM), HBM4, are easing, citing an increase in shipment share and improved yield rates. The target price was raised from 400,000 won to 450,000 won, with a maintained investment opinion of "Buy."

Yonhap News Agency

Jung Woosung, a researcher at LS Securities, wrote in a report on this day, "The share of HBM4 in Samsung Electronics' HBM shipments rose rapidly from about 5% in the first quarter of this year to approximately 35% in the second quarter," adding, "It is estimated that the blended yield for HBM in the second quarter improved by more than 5 percentage points compared to the previous quarter, despite the sharp increase in new product mix."

Researcher Jung further explained, "Unlike when HBM3E was first mass-produced, it is understood that HBM4 has achieved relatively high manufacturability." He analyzed, "If blended yield continues to improve as the HBM4 mix expands, the speed at which future HBM revenue growth translates into overall corporate profitability could outpace previous expectations."

Until now, Samsung Electronics' HBM business has been a factor in discounted stock price valuation compared to competitors, due to delays in customer certifications and low manufacturability. Researcher Jung noted, "As both the expansion of shipment composition and yield improvement are being confirmed for HBM4, these discounting factors are likely to gradually diminish." He diagnosed, "As HBM4 begins to contribute more to memory business profits, the profit structure—which previously centered on general-purpose DRAM—will also see positive changes."

Researcher Jung remarked, "While memory supply shortages are expected to continue in the mid-to-long term, the room for further price increases may be more limited than before since the proportion of memory in server budgets has already risen with price hikes." He stated, "Over the medium to long term, stock price direction will react more sensitively to expanded HBM4 supply and the pace of new AI demand growth than to memory prices themselves."

This content was produced with the assistance of AI translation services.